Introduction and background

Oil and gas producers continue to push offshore projects into the arduous and colder Arctic frontiers, driven primarily by the need to secure future oil and gas reserves (Martin, 2012;

Paulsen et al., 2002). As the offshore industry expands into the Arctic and sub-Arctic, the oil and gas exploration activities generate all kinds of wastes, varying from contaminated runoff water to material packaging; however, the majority of the waste is associated with the drilling cuttings, from the drilling activities (Geehan et al., 2007). To maximise the value of each project and optimise their portfolio of investment opportunities, oil and gas companies operating in the region are attempting to properly identify suitable methods of handling the drilling waste. Current industry practice for managing and disposing of drilling waste is broadly classified into three major categories: i) offshore discharge – treating and discharging the drilling waste to the ocean (sea), ii) offshore injection – re-injecting the drilling waste offshore both in a dedicated re-injection well and/or in a dry (dead) well, and iii) skip-and-ship – hauling the drilling waste back to shore for further treatment and disposal (Veil, 2002).

Drilling wastes handling practices pose health, safety and environmental (HSE) risks due to the potential for releases or spills of drilling fluids and cuttings during operation on the well pad or off-site during transporting of drilling fluid additives or waste drilling fluids and cuttings (Valeur, 2010; Sadiq et al., 2004; Ayele et al., 2015a). The releases or spills of drilling fluids to the Arctic marine environment is of major concern for two main reasons: economical loss associated with expensive drilling fluid discharge and potential adverse environmental impacts or marine pollutions (Sadiq et al., 2004). Moreover, the peculiar challenge and an overriding factor that must be accommodated in the analysis of the potential hazards and HSE risks, in the Arctic offshore drilling waste handling activities, is an extreme cold climate with a significant variations in temperature within a short period of time (Svensen and Taugbol, 2011; Paulsen et al., 2005; Guo et al., 2005) (Freitag and McFadden, 1997). The other predominant factor that have negative impact on drilling waste handling activities in the region is icing condition. Sea ice and atmospheric icing potentially lead to accretion of ice on the waste handling systems and structures (Battisti et al., 2006). The process of accretion of ice have significant impact on the performance of offshore waste handling system, the safety of personnel, and the overall economics of waste management operation (Gudmestad et al., 2007; Jacobsen and Gudmestad, 2012; Gudmestad and Strass, 1994). Typically, the hazards and risks associated with Arctic offshore operation will differ vastly depending on the ice conditions, very low temperatures, water depths, and proximity to existing support infrastructure of the specific area and region (Øien, 2013; Martin, 2012; Louis, 1983).

In addition, when deciding on the type of drilling waste handling technologies to use for work in cold Arctic environments, the operators need to conduct comprehensive occupational hazard assessments of the drilling waste streams. This is especially due to the negative impact of cold on human health and performance, as well as on work productivity,

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quality and safety (ISO 15743, 2008). The rigorous hazards assessment can be done by considering the HSE aspects, and by striking an appropriate balance between their potentially conflicting requirements (IPIECA and OGP, 2009).

Furthermore, the prevailing low temperatures magnifies the embrittlement of waste handling systems causing failures at loads that are routinely imposed without damage in warmer climate; and it also amplifies the system wear rates as a result of lubricants failure (Larsen and Markeset, 2007). In addition, the cold temperatures reduce the performance of components of the waste handling systems; especially the solids-control system – a system that separates drill solids from the drilling fluid, thereby allowing it to be recirculated down the drill pipe. Hence, to meet the drilling-performance demands and reduce the consequences from component failure, effective spare parts and logistic support is essential. However, spare parts logistics is affected in complex ways while operating in the Arctic, since the area is sparsely populated and has insufficient infrastructure. It is also greatly affected by the distinctive operational environment of the region. Therefore, in order to have an effective logistic plan, the effect of all influencing factors, called covariates, on the transportation of the spare parts need to be identified, modelled and quantified by the use of an appropriate dynamic model.

To addresses the above-mentioned issues, assessing and understanding of the peculiar Arctic risks can provide the knowledge and competence for measuring as well as managing the HSE risks related to drilling waste handling activities. Further, based on the above discussion, it is an important requirement to consider the impact of the operating environment, when identifying those cost-effective drilling waste handling practices with a low level of risk for oil and gas companies operating under Arctic conditions. In addition, a risk-based approach that models a complex time-dependent and uncertain variables have a key role to play in ensuring the safety standards and regulation associated with handling and transporting of the drilling wastes in the Arctic offshore (Hasle et al., 2009). The risk-based model ensures a better perceptive of the inherited hazards, mitigation measures, and inbuilt risks in the waste handling practices (Aven et al., 2006; Øien, 2013). Further, employing risk-based approaches encourage a deeper understanding of the unique Arctic risks related with waste handling system failures, than what would be possible under generic approaches.

For the purpose of this study, ‘‘the Arctic’’ is taken simply to mean the Norwegian Arctic and the starting point of our discussion is the Barents Sea.

1.1. Problem statement

When planning and performing drilling operations in harsh, cold climates and ice-infested waters such as Arctic offshore, it is essential to identify the main risk factors that may influence the operations and the chosen waste handling technology (Sadiq et al., 2004;

Melton et al., 2004; Neff et al., 1987). Proper risk assessment will result in more advanced design, more efficient operations, and improved environmental protection (Northcott et al., 2005; Abdalla et al., 2008). Moreover, it can be used to identify weaknesses or strengths of existing or new waste handling systems in a structured way and hereby highlight factors of success and failure (Zurbrügg et al., 2014). It is also a core element in examining the overall quality of the drilling waste handling solutions before deploying the waste handling equipment and work force.

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To examine the potential hazards associated with offshore drilling waste handling activities in the cold region, a number of safety and risk assessment models have been developed; see e.g. Veil (2002), Maunder et al. (1990), Boesch and Rabalais (2003), McKay et al. (1991), Schumacher et al. (1991), Cohrssen and Covello (1999), Risikko et al. (2003), Sadiq and Husain (2005), Lindøe et al. (2006), and Broni-Bediako and Amorin (2010) and Hoehn et al. (2000). In addition, to identify the occupational hazards and assess the level of risk associated with those hazards, during handling and managing of the drilling wastes in cold regions, several studies have been carried out; see e.g. Giedraitytė (2005), Holmér (1999), Risikko et al. (2003), Geller (2005), Robson et al. (2007), and Lindøe et al. (2006). Furthermore, the application of Bayesian Network (BN) to risk assessment and decision-making in the offshore operation, are getting popularity and have been discussed in several literatures; see e.g. Aven and Rettedal (1998), Røed et al. (2009), Pollino et al. (2007), and Lee and Lee (2006).

However, most of the available qualitative, quantitative and BN based risk and occupational hazard assessment models, suffers limitation as they fail to capture and model the time variant operating environment. Robust waste management practices, especially in the Arctic offshore, requires understanding of the unique risks due to icing, ice loading, remoteness, very low temperatures, wind-chill effects, and etc., in addition to the

‘‘conventional’’ or ‘‘tolerable’’ risks. Hence, in order to minimise and manage the potential hazards and risks, during handling of drilling wastes in Arctic regions, it is important to model the complex and time-dependent operating environment.

Moreover, cost factors will most often decide the acceptable level of system (including waste handling systems) performance with respect to capacity and availability (Kayrbekova et al., 2011). To identify cost-effective and efficient waste handling practices, for Arctic offshore drilling, it has been argued that two questions are fundamental (Sculpher and Claxton, 2005; Cantor, 1994; Barton et al., 2008). Firstly, which drilling waste handling practice is estimated to be cost-effective and environmentally sustainable, based on the prevailing evidence? Secondly, should further research be carried out in order to minimise the level of uncertainty related to the decision? To answer these questions and determine the cost-effectiveness of the waste handling practices, a number of studies have been carried out, see e.g. Gentil et al. (2010), Kazanowski (1966), Kazanowski (1968), Barton et al. (2008), Cellini and Kee (2010), Levin and McEwan (2001), Clift et al. (2000), Finnveden et al. (2007), Morrissey and Browne (2004), Popovich et al. (1973), Matthies et al. (2007), Curran (1996), Kiker et al. (2005) and Finnveden (2000).

However, in most of the available cost-effectiveness literatures, there is a lack of consideration of the impact of the operating environment on the cost profile. This is considered as a significant shortcoming, especially, in an industry with high level of investment, such as the Arctic offshore operations. For instance, the offshore industry in the region is experiencing longer lead times due to frozen drilling cuttings being stuck in skips while waiting to get emptied onshore for further treatment (Svensen and Taugbol, 2011). This means that the longer the lead-time, the higher the cost of the waste handling practice will become. Hence, it is essential to assess the cost-effectiveness of each waste handling alternatives by identifying those costs that will have the most significant implications on the strategic decision.

Furthermore, to assure effective logistic support and, consequently meet the drilling-performance demands, precise estimation of the spare parts transportation time and its associated probability plays a crucial role (Ghodrati et al., 2007; Ayele et al., 2013b).

Hence, several models have been studied in the literature to estimate transportation time

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and analyse the dynamic behaviour of the transportation network; see e.g. Kaufman and Smith (1993), Lo and Szeto (2009), Wong et al. (2007), Pretolani (2000), Pfohl and Ester (1999), Haghani and Jung (2005), Lemp et al. (2010), Ran and Boyce (1994),Wong et al.

(2005), Huiskonen (2001) and Späth (2000). The traditional models, however, lack the comprehensive integration of the effect of time-independent and time-dependent covariates on the spare parts transportation. Hence, it is essential to develop a dynamic model that is used for prediction of the spare parts transportation time by considering the time-independent and time-dependent covariates.

1.2. Research questions

Based on the above discussion, the main problem of the research study is to assess the HSE risks related to the operational performance and cost-effectiveness of drilling waste handling alternative, which includes identifying, and assessing risks throughout the logistical chain of handling of petroleum related waste. The following research questions are posed based on the research problem:

1. How to develop a methodology for the identification of suitable drilling waste handling systems that supports and facilitates the decision-making process, by considering the Arctic operating conditions?

2. What are the major risks related to the design, operation and management of various alternative waste handling systems in the Arctic?

3. How can the most cost-effective waste handling system with low level of risk be identified for oil and gas industry operated in the Arctic?

4. How to consider the dynamic operational conditions of the Arctic in spare parts transportation time estimation, in order to meet the drilling waste handling system performance?

1.3. Research purpose and objectives

The purpose of this research is to study, identify, and propose a methodology for Arctic offshore drilling waste handling operations by considering the complex and fast-changing nature of the Arctic operational conditions. Moreover, the study seeks to foster an integrated interdisciplinary understanding of technical and operational risks associated with drilling wastes and their management by implementing the risk-based analysis. More specifically, the sub-objectives of the research are:

 To propose a step-by-step methodology for the identification of suitable drilling waste handling systems for Arctic offshore drilling, which can offer the solution to filling the gaps that exist in the present system identification practices.

 To evaluate and assess HSE risks peculiar to the Arctic offshore drilling waste handling activities and develop a risk assessment model by considering the complex and time-dependent operating environment.

 To identify the most cost-effective available drilling waste handling system with low level of risk for oil and gas industries operated in the Arctic.

 To develop a dynamic model for spare parts transportation by considering the effect of the time-independent and time-dependent covariates on the spare parts transportation operation.

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1.4. Scope and limitation of the research

The limitation of the findings are outlined below.

- In the Arctic offshore waste handling operations, especially in the Barents Sea, there is a lack of historical system failure rate data. Hence, judgements provided by those people with expertise in identifying potential hazards and risks of undesirable events are utilised at various stages of the risk analysis in order to perform effective risk identification and quantification. The estimated risk results presented in the case studies should be updated as new data/evidence becomes available, preferably in the form of field (hard) data reflecting the actual operational experience in this Arctic region and therefore gradually supplanting the opinions elicited from experts.

- A shortage of time to delivery and weather-related data in the Arctic environment was a challenge during the computation of the probabilities and spare parts deliverability. The estimated results presented in the case study may thus need to be tested through replication of findings in more case studies.

- In the case study analysis the basic assumptions are a year-round operational window and there is no winterisation or enclosure of the waste handling systems to protect the vulnerable areas.

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